Premier Matteo Renzi's cabinet approved a decree featuring measures aiming to reinforce Italy's troubled banking sector overnight. The decree includes the setting of a single group with at least one billion euros in capital bringing together Italy's many small credit cooperative banks (BCC). Renzi said the coop banks will not be forced to sign up, but those that opt out must be have at least 200 million euros in reserves. "It's reasonable there will be one group, which will form a safeguard and cohesion umbrella for all the credit cooperative banks that decide to stay inside," Renzi told reporters. "The credit cooperative banks model will remain but it must be inside a system that is stronger and more solid".
Economy Minister Pier Carlo Padoan said about 10 of the BCCs have reserves of at least 200 million euros. "That does not mean that they have to opt out, but they can," Padoan said.
The Federcasse federation of cooperative banks (BCCs) on Thursday said the government's reform of the BCCs was "valid" but voiced concern "on the possibility of allowing BCCs above a certain capitalisation threshold to cede banking activity to a limited company with a 20% enfranchisement of the indivisible reserves". Federcasse President Alessandro Azzi voiced the hope that parliament will "improve" the reforms to make sure the original goal of "consolidating and bolstering Italian banking firms" is achieved. The BCC reform was approved by cabinet Wednesday night.
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